City, town leaders fight for car tax

Hartford - The governor's proposal to eliminate the car tax for vehicles worth less than $28,571 is "dead on arrival," Jim Finley, executive director of the Connecticut Conference of Municipalities, said Wednesday.

"In discussions with legislators, the governor's proposal, as proposed, on the car tax elimination in fiscal year 2015, is dead on arrival," Finley said. "There are no votes for it."

Mayors and public workers from the state's major cities gathered outside the Capitol pressroom on Wednesday seeking a place at the table. They said that if the governor's proposed budget were to pass as is, they would have to cut services and jobs and possibly raise property taxes.

Gov. Dannel P. Malloy proposed eliminating much of the car tax in February as part of his budget. Municipal leaders are opposed to the proposal because, they said, it would decrease city and town revenue. Municipal leaders also have said Malloy's proposal to increase education spending and decrease funding for operational expenses such as firefighters' and police officers' salaries also would hurt the towns and cities.

"When we make cities less safe and do less to train the workforce and degrade basic services … people make choices" to move somewhere else, New Haven Mayor John DeStefano said.

But Sen. Cathy Osten, D-Sprague, said Wednesday that her understanding was that legislators were cautious about eliminating the car tax.

"Until I see another reason, I am not for eliminating the car tax," she said.

In total, municipalities would lose about $633 million if the car tax disappeared, according to the Office of Fiscal Accountability. Municipalities would lose another $128 million from their operating budgets if state funding were shifted to education funding, according to CCM.

In response to the press conference, Mark Ojakian, chief of staff for the governor, wrote in an email, "The governor's priority is to continue the effort to improve public schools and create jobs, and to do it without raising taxes.

"Change is hard, but change is also necessary."

Finley said municipal leaders were in discussions with House Speaker Brendan Sharkey, D-Hamden, the Municipal Opportunities & Regional Efficiencies Commission and legislative leadership. Municipal leaders have pledged to work with them to make the car tax system more equitable without hurting municipalities or property taxpayers.

Bridgeport Mayor William Finch said the car tax is difficult to collect, but it can't simply be eliminated, because that would leave towns and cities with budget holes.

If the car tax were eliminated, it would have to be phased out, he said, adding that he would favor having one state tax rate for all cars. Currently, car owners pay taxes to the municipality where they live based on that town's tax rate.

"We don't have a fair system that is dependable and reliable, and we want to work with the legislature to get there," Finch said.